Thales Alenia Space Mum on Satellite Order Said To Be for Morocco

PARIS — Thales Group of France said its space division has booked an order with an unnamed African nation for an Earth observation satellite, with the Thales share of the contract valued at around 300 million euros ($410 million).

Given the size of the order, the contract is likely the two-satellite deal disclosed in December as being a joint bid by Thales Alenia Space and its sometime competitor, Airbus Defence and Space. Industry officials have described the contract as with the government of Morocco. The two companies have declined to comment on it.

The Thales contract reference is contained in the company’s annual financial report that gives a vague listing of large contracts booked in 2013.

Airbus and Thales Alenia Space, which is 67 percent owned by Thales and 33 percent by Italy’s Finmeccanica, are usually competitors. They are currently battling to sell radar Earth observation systems in Russia, for example, and recently competed for a South Korean radar instrument. After having lost the first-generation Korean radar to Thales Alenia Space, Airbus won the second-generation contract.

But in optical Earth observation, the companies are frequent partners for high-resolution Earth observation export orders, especially in international competitions that require French government political backing. French government officials have long said their industry’s export potential is improved when there is a single French bid rather than two competing bids for a given contract.

Such concerns have not prevented the two from going their separate ways for Earth observation systems in contracts in Turkey and Kazakhstan, however.

Airbus Defence and Space and Thales Alenia Space are dividing work on the two-satellite, 800 million-euro Falcon Eye system for the United Arab Emirates armed forces, a contract that, barring another roadblock, should be signed by mid-March, industry officials said.

The Falcon Eye system will bear a resemblance to the two Pleiades satellites, built by the French government, to which Airbus Defence and Space’s services division has access for commercial sales. The Pleiades satellites have a ground sampling distance at nadir of 70 centimeters, but can be sold as 50-centimeter images following resampling, meaning laying one image over another.

The Falcon Eye contract signature was held up for several months because of U.S. government hesitation about whether to permit U.S. components, which feature in Pleiades and Falcon Eye, to be exported for eventual use by the UAE’s armed forces.

UAE officials have said they have been given complete freedom of use of Falcon Eye, whose two satellites are scheduled for launch aboard two European Vega rockets.

The Moroccan system — if that is in fact the government in question — will also be launched on two Vega rockets in 2017 and 2018 under a launch contract announced in early January by the Arianespace commercial launch consortium, which at the time declined to disclose the end customer.

Given the recent date of the contract, it remains unclear whether the same U.S. components whose export was stalled for Falcon Eye will have trouble making their way to France for the Moroccan program. Export approval for the U.S.-built Falcon Eye hardware was granted during the recent U.S.-French summit in Washington.

The 20-nation European Space Agency and the European Commission, on the recommendation of Europe’s satellite industry, have assembled lists of research and development investment priorities to strengthen Europe’s autonomy in space-based systems.

The European Commission’s recently approved Horizon 2020 program, which has secured some 1.4 billion euros over seven years for space technology research, is one possible avenue to accelerate the European autonomy drive.

But government and industry officials have said Horizon 2020, which has already all but excluded telecommunications technologies from its mandate, is at risk of dispersing the funding too widely to have any major impact.

Thales Alenia Space and Airbus Defence and Space — the former Astrium Satellites — together and separately have sold Earth observation satellite systems to more than a dozen nations.

The launch, in December 2011 and December 2012, of the two Pleaides satellites, to which the French Defense Ministry has access to a monthly quota of images, gave Airbus Defence and Space its first tool to challenge U.S. geospatial imagery provider DigitalGlobe of Longmont, Colo.

Before then, Airbus had use of the lower-resolution Spot satellites, which provided a regular stream of business but left the company out of the higher-growth high-resolution end of the market.

In presenting its annual financial results Feb. 26, Airbus Group said its satellite services business, which includes the sale of imagery products, underperformed in 2013. But one Airbus official said the space-imagery division, which has both radar and optical satellite systems in orbit, made a small profit in 2013 after losses in 2012.

But if satellite services — mainly telecommunications and Earth observation — was down in 2013, Airbus pointed to the sale of Earth observation satellites as a highlight for the year.

DigitalGlobe, reporting its results Feb. 27, said it fell short of its revenue target in 2013 in part because of competitive pressure from Airbus’ Pleiades.